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Japan eases oil crisis, but energy import costs keep climbing

A June survey by Teikoku Databank found as many as 90% of Japanese companies said higher energy prices were hurting operations, even as Japan diversified supplies and drew on strategic reserves.

Reported · Written up by our desk · Energy

Japan’s oil crisis has eased in recent weeks as the resource-poor G7 economy reduced reliance on Middle East crude and began releasing oil from strategic reserves, as reported by OilPrice. Japan previously depended on Middle East supplies for more than 90% of its crude imports, with about 70% of that oil typically arriving via tankers traveling through the Strait of Hormuz. OilPrice notes that since the conflict in the Middle East began, Japan sought alternative sources after the Strait of Hormuz effectively faced de facto closure, and in April Japan imported the lowest volume of Middle East crude on record going back to 1979.

OilPrice said the higher cost of sourcing crude from farther away has weighed on Japan’s industrial and broader economic activity, with an Asahi Shimbun report citing a June Teikoku Databank Ltd survey. The outlet reported that up to 90% of Japanese companies said rising energy prices were negatively affecting their operations.

OilPrice also said Japan joined an IEA-coordinated effort to release crude and oil products, including a target of 400 million barrels globally, as the country adjusted its supply mix. The article referenced the Middle East sources that had previously supplied most of Japan’s oil, including Saudi Arabia, Kuwait, the UAE, and Qatar.

Latest closeWTI crude $82.40 ▲1.4%

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